This research examines how partisan groups form identities through misaligned perceptions of public trust in institutions. The study proposes that partisans perceive the general public as having less trust in the institutions they themselves trust. Surveying Republicans and Democrats about their personal institutional trust and their beliefs about the general public's trust levels—and comparing findings against 2021 General Social Survey data—we find that Democrats trusted knowledge-focused institutions more than Republicans, while Republicans showed greater confidence in traditional institutions. Notably, both groups believed the general public trusted their preferred institutions less than actual survey data indicated. We argue that viewing one's partisan in-group as misaligned with broader societal values represents a critical component of group identity formation.